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Does a donor get a write off for what real property is appraised for or for what the organization sells it for?

I am concerned since real property can be sold for less then its appraised for. Specially in this market.

Public Comments

1. The deduction is for the fair market value (FMV) at the time of the donation. That said, the IRS has been looking more closely at donations of real property. The appraiser may be aware of the IRS scrutiny.
2. The DONOR uses the appraised value of the property on the day it was gifted. Make sure you have a valid WRITTEN appraisal from a reputable appraiser. The Organization sale is completely irrelevant. Not your concern.
3. Two tax issues for gifts. 1) Any tax deduction and 2) what is the basis in the hands of recipient. If a donor gives any property, be it a car, cash, a house, a computer, copyright to a work, a patent etc, the donor ONLY gets a tax deduction if the recipient is a charity. Charities are broken down into PRIVATE foundations and PUBLIC foundations. The rules are more strict when the charity is private. Usually, the deduction is the LESSER of the FMV at the time of transfer/gift or the basis. The basis is how much the donor paid for the property [less any depreciation deductions already taken]. This prevents the tax abuse known as the double deduction. It is almost impossible nowadays to get a deduction for the fair market value when the FMV exceeds the cost basis. The recipient is NOT a charity, NO DEDUCTION. nada But the recipient must keep track of his tax basis. This is important when the recipient later sells it. Example. I buy property [an Apollo 11 space postage stamp] for $40. The property rises in value to $61 [$21 unrealized gain = 61 minus 40] Suppose I give my stamp away to my daughter. She gets a basis of $40, not $61. Ten years later, she sells the stamp for $44. Even though the stamp has declined in value from $61 to $41 --- a $17 loss, she reports a $4 gain. This is because when I made my gift, I did NOT pay any cap gain tax on the $21 gain. The "carryover basis rule" [google it] preserves the $21 gain which never created a tax laibaility for me.
4. The rule about the deduction being what the organization sells it for is only for cars, not other property. Except for cars, property is deductible for its fair market value at the time of the donation.
5. If you donate real estate that has appreciated in value, you usually get a deduction for the fair market value at the time of the donation. It is your responsibility to back up this value with a qualified appraisal. If the charity sells the property for much less than the appraised value, the IRS may question your deduction. There are many details involved in donating property and your should consult a tax person regarding your situation. Donations of appreciated property are subject to many restrictions that a tax professional can review for you.